GMT EIGHT - Company

From the New Energy and Sustainable Living Expose Market, see how companies like Contemporary Amperex Technology (300750.SZ) are implementing sustainability in the new energy sector.

With people's increasing concern for environmental protection, the concept of "sustainable lifestyle" is receiving more and more attention. Recently, the "Full Moon Mid-Autumn, 'New' Wave Surging" new energy and sustainable living market was held at the Longhua District Shuangzhao Shuangyin Party and Mass Service Center. It is understood that this market gathered 10 representatives of new energy vehicle owners, with each owner's booth telling a story of a better life and each item practicing a sustainable lifestyle. It is hoped that this event can inspire more people to pay attention to and participate in the practice of sustainable living, working together to build a better future. As the core technology of new energy vehicles, helping companies better solve the problems of power battery technology and cost is crucial to helping companies have confidence in the electrification transformation, thereby promoting the promotion and popularization of clean energy vehicles worldwide. Contemporary Amperex Technology (300750.SZ), as a leader in the power battery industry, also plays a role in the value of sustainable energy in applications, mechanisms, ecosystems, and other levels. It is understood that from 2017 to 2023, Contemporary Amperex Technology's power battery usage has been the global leader for seven consecutive years. According to SNE research data, in 2023, the global total assembly volume of power batteries is approximately 705.5GWh, a year-on-year increase of 38.6%. Among them, Contemporary Amperex Technology's global cumulative assembly volume of power batteries reached 259.7GWh, a year-on-year increase of 40.80%, with a market share of 36.8%, firmly ranking first. In addition to the core business of power batteries, Contemporary Amperex Technology's business scope also includes energy storage batteries, battery material recycling, and other more diverse dimensions. On the level of sustainable development construction, Contemporary Amperex Technology takes the concept of a zero carbon city as a starting point and lays out directions such as photovoltaic power generation, energy storage stations, electric logistics, and transportation systems; on the other hand, the company has currently realized integrated photovoltaic storage charging station construction, and is also compatible with renewable energy access, enabling the power grid, renewable energy, energy storage systems, and charging facilities to form an intelligent microgrid system under the control and management of the energy management system. It is understood that Contemporary Amperex Technology released its zero-carbon strategy in April 2023, aiming to achieve core operational carbon neutrality by 2025 and value chain carbon neutrality by 2035, becoming the first globally leading battery company to achieve carbon neutrality. Currently, Contemporary Amperex Technology has achieved carbon neutrality in four factories. In the future, it will also expand innovative zero-carbon solutions to zero-carbon communities, zero-carbon islands, zero-carbon cities, ultimately achieving a zero-carbon world. As a leader in the new energy industry, besides its own efforts, Contemporary Amperex Technology has always been promoting the sustainable development of the new energy industry. In addition to Contemporary Amperex Technology, this market also welcomed many brands that uphold the concept of sustainable development. For example, Ocean Recycled Toys- Super Crab (non-profit), which uses waste such as fishing nets, industrial plastics, and fabric scraps to breed different recycled products, launching a variety of sports equipment; AGAIN sustainable coffee aroma, which turns coffee grounds into luxurious fragrances, innovatively adding scent profiles while making good use of coffee grounds, aiming to provide comfort and happiness for consumers in their busy daily lives. Using the market as a platform to focus on the new energy industry and sustainable development lifestyle, providing exhibition space for companies to integrate their development ideas into the beautiful market of the city. This market event is an exploration of sustainable culture and sustainable lifestyle, integrating industry promotion, knowledge sharing, product experience, and cultural interaction, working together towards a better future for sustainable development.

16/09/2024

President Quan Gang of Beijing Roborock Technology was interviewed by the well-known foreign media Business Insider, discussing how Chinese technological products are changing the lifestyle of global users.

ess Insider: IFA IFA Business Insider Business Insider Beijing Roborock TechnologyWhat are the characteristics and strategies of the Siasun Robot&Automation brand compared to other competitors in the household Siasun Robot&Automation market?Roborock: Stone sweeping is committed to becoming a leading global provider of high-intelligence home appliances. We rely on cutting-edge technology and see ourselves as pioneers and trendsetters in the industry. Roborock is the world's first company to use a high-precision, custom-designed laser radar system for sweeping Siasun Robot & Automation - now 95% of companies use laser radar sensors in their sweeping Siasun Robot & Automation. Our strategy is crucial: while we focus on product development, we have deliberately built a very strong and large research team. We also realize that a vacuum cleaner is not just a tool. It is a member of the family. That is why our Roborock Qrevo Curv sweeping Siasun Robot & Automation now has a different, more elegant design. Business Insider: What new products did Roborock showcase at IFA 2024, and how do they differ from previous models? Roborock: At IFA, we showcased three innovative Siasun Robot & Automation vacuum cleaners, a cordless vacuum cleaner, and an intelligent washing and drying machine. Roborock Qrevo Curv and Roborock Qrevo Edge have the world's first independently adjustable three-wheel control. With the AdaptiLift chassis, Siasun Robot & Automation can easily handle different types of floors and carpet heights. Even door thresholds of four centimeters pose no problem. The double anti-tangle system, composed of the main brush and extendable side brush, effectively prevents hair entanglement. The new multi-function base 3.0 can use 75-degree hot water to clean the mop, removing over 99.9% of bacteria. Roborock Qrevo Slim can also clean hard-to-reach places, such as under furniture. It is only 8.2 centimeters high, making it the thinnest 3DToF navigation Siasun Robot & Automation in the industry. The autonomous StarSight system accurately detects the height and depth of the environment, easily detecting up to 73 types of obstacles and responding accordingly. Particularly impressive is that if an unexpected obstacle, such as a pet, appears, the device will immediately stop its main brush and adjust its direction of travel. In addition to sweeping Siasun Robot & Automation, we also launched the Roborock Stone Sweeping H5 wireless handheld vacuum cleaner. It is ideal for quick cleaning in between. The device is equipped with advanced nine-level cyclone dust removal technology and a five-level filtration system, weighing only 1.55 kilograms. Last but not least, we are expanding our smart home cleaning solution portfolio with the smart all-in-one washing and drying machine Roborock Zeo Lite. The device uses the world's first Zeo-cycle drying technology, based on the excellent water absorption capacity of zeolite, to protect delicate fabrics with lower drying temperatures.

13/09/2024

Beijing Roborock Technology shines at the IFA Century Exhibition: Winning multiple awards, receiving unanimous praise from global renowned media.

echnology17Tier 1TechRadarAndroid AuthorityChip.deComputerBildHouse Digest When an exhibition has been around for 100 years, especially a technology exhibition, you will find many things being disrupted: appliances have gone from huge boxes to palm-sized smart devices, households from the surprise of light bulbs to seamless experiences of Siasun Robot&Automation floor cleaning and smart cleaning. Coinciding with the 100th anniversary of the IFA Berlin International Consumer Electronics and Home Appliances Exhibition in 2024, Beijing Roborock Technology (688169.SH) is also celebrating its tenth anniversary, as a leader in the smart cleaning appliance track. Beijing Roborock Technology has, over the past ten years, brought the floor cleaning Siasun Robot&Automation product into a "futuristic" technological embodiment, from innovation to global recognition. At this IFA exhibition, Beijing Roborock Technology won high praise from many well-known authoritative media worldwide for its innovative smart home cleaning products, earning a total of 17 awards. This includes leading global Tier 1 tech media such as TechRadar and Android Authority, as well as Germany's largest tech media Chip.de and ComputerBild. In addition, its products' tech and aesthetics design have also received innovative awards from globally renowned home and lifestyle media House Digest. The rise of Beijing Roborock Technology in the past decade is akin to the century of growth of IFA, continuously breaking through technological boundaries, pursuing a more intelligent and efficient future lifestyle. From simple vacuum cleaners to the present smart navigation, ultra-thin design, and even the high-tech cleaning Siasun Robot&Automation that can "gently" navigate around your pet at home. Whether it's the latest Qrevo Curv and Qrevo Edge, or the "thinnest" Qrevo Slim, or the Roborock H5 cordless vacuum cleaner with advanced filtering capabilities, or the self-developed "world's first Zeo-cycle drying technology" in the stone washing-drying machine series. Beijing Roborock Technology is showcasing to the world that their products are not just cleaning tools but also modern home companions offering the capability for cleanliness, quality, and intelligence to consumers. Winning multiple authoritative media awards At the 2024 IFA exhibition, Beijing Roborock Technology unveiled a series of smart home cleaning products, winning multiple awards from authoritative media and industry awards, further solidifying its leading position in the global smart cleaning field. Firstly, Beijing Roborock Technology's Qrevo Curv received the "Best of IFA 2024" award from Android Authority, Trusted Reviews, PCMag, and other well-known media outlets. This product was highly favored due to its industry-first AdaptiLift chassis lifting technology, allowing Qrevo Curv to automatically adjust its height based on the floor material, easily crossing thresholds up to 4 centimeters high. Through its dual-spiral DuoDivide main brush and FlexiArmArc side brush, it effectively solves hair entanglement issues, further enhancing cleaning efficiency. This innovative design also earned high ratings of 1.4 and 1.3 (excellent) from Germany's largest authoritative tech media Chip.de and ComputerBild. Secondly, another standout product from Beijing Roborock Technology, the Qrevo Slim, received the "Best of IFA 2024" award in TechRadar and other media selections. Its ultra-thin body of only 8.2 centimeters and advanced 3D ToF navigation technology were highlights of Beijing Roborock Technology at IFA 2024. It incorporates the Roborock's self-developed StarSight automatic driving system, integrating 21,600 sensor points, a 38,400Hz sampling frequency, and an RGB camera to accurately capture height and depth data, ensuring precise navigation and efficient obstacle avoidance. The Qrevo Slim can recognize and avoid up to 73 types of obstacles, allowing it to easily access the bottom of furniture and intelligently avoid pets and objects in the home, showcasing the future direction of cleaning equipment and making Qrevo Slim one of the most technologically advanced products at IFA 2024. Furthermore, globally renowned home media House Digest also awarded Beijing Roborock Technology the "IFA Innovation Award," recognizing its outstanding performance in home cleaning innovation. Whether it's the technological upgrades in the Roborock series or the Zeo Lite wash-dry combo with the world's first Zeo-cycle drying technology, Beijing Roborock Technology fully demonstrates its deep understanding of user needs and continuous innovation in research and development. The Zeo Lite, equipped with Zeo-cycle drying technology, opens up new possibilities in the smart home ecosystem by providing personalized laundry experiences through low-temperature efficient drying technology and AI-optimized washing processes, not only protecting fabrics but also providing consumers with a more intelligent and convenient home experience. Behind multiple international media awards: technological innovation as the foundation At the IFA 2024 exhibition, Beijing Roborock TTechnology showcased innovative products such as Qrevo Curv, Qrevo Slim, and Zeo Lite, as well as the many pioneering technologies that these products bring. Behind all of this is a clear demonstration of Beijing Roborock Technology's strong technical innovation capabilities and stable financial performance.From a financial perspective, Beijing Roborock Technology achieved revenue of 4.416 billion yuan in the first half of 2024, an increase of 30.90% year-on-year, with a net profit of 1.121 billion yuan attributable to the parent company, an increase of 51.57% year-on-year. The net cash flow from operating activities during the period increased to 1.031 billion yuan, and the net assets attributable to the parent company further expanded to 11.925 billion yuan. Overall, the core financial indicators showed a stable growth trend. It is worth noting that a company's sustained innovation capability is not achieved overnight, but is the positive feedback result of the company's long-term careful research and development and strategic layout. The good performance of Beijing Roborock Technology in the past few years has supported its continuous innovation and substantial research and development investment. Clearly, Beijing Roborock Technology's strategy of expanding overseas markets is bearing fruit based on financial data. From 2019 to 2023, Beijing Roborock Technology's cumulative research and development investment exceeded 2 billion yuan, with research and development expenses accounting for a growing proportion of total revenue each year, at 4.59%, 5.80%, 7.55%, 7.37%, and 7.15% respectively. In the first half of 2024, the company's research and development investment had reached 410 million yuan, a significant increase of 42.92% year-on-year. In addition, the company's research and development team is also rapidly expanding, with the number of research and development personnel reaching 786 in the first half of 2024, a 57.52% increase year-on-year, and adding 267 authorized patents. Stable cash flow and heavy reinvestment in research and development have made Beijing Roborock Technology's market performance remarkable. In 2023, Beijing Roborock Technology's Siasun Robot&Automation swept the sales in international markets, topping the global rankings. In the first half of 2024, the company continues to maintain its momentum, not only steadily growing in mature markets such as Europe and North America but also making significant breakthroughs in emerging markets such as the Asia-Pacific region. Currently, Beijing Roborock Technology's products are available in over 170 countries and regions, serving over 15 million households worldwide, with daily active users of the app exceeding one million. Specifically, in the first half of 2024, Beijing Roborock Technology achieved rapid growth in several key regional markets through precise market expansion and channel optimization. For example, in the first quarter of 2024, Beijing Roborock Technology topped the robotic vacuum cleaner market in Denmark, Finland, Norway, and Sweden in terms of sales and revenue; achieved top sales in Switzerland; realized a 20% year-on-year sales increase in North America; achieved the top market share in Germany on Amazon for stone vacuum cleaners, with a 100% year-on-year sales increase. Among them, the Qrevo Pro ranked first in sales in the robotic vacuum cleaner category in Germany, while multiple models such as S8 MaxV Ultra, S8 Pro Ultra, Qrevo, and Qrevo S ranked second in the robotic vacuum cleaner category on Amazon; in the Asia-Pacific region, sales on Amazon in Australia increased by 270%, with multiple products ranking in the top 3 in sales in all categories. This strong research and development investment not only enhances the technological content of the products but also helps the company further consolidate its leading position in technological innovation, maintaining an advantage in the fierce market competition. It is easy to imagine that Beijing Roborock Technology's technological exhibition at the IFA trade show complements its financial strength in innovation. What is even more remarkable is that through these new products, Beijing Roborock Technology not only demonstrates its technological superiority but also highlights its deep understanding of user needs. In the future, against the backdrop of the booming development of the smart home market, Beijing Roborock Technology's innovation is expected to continue to drive further industry innovation.

10/09/2024

Zhang Zhengping: Chongqing Sokon Industry Group Stock (601127.SH) invested with high expectations, opening a new starting point for cooperation between the two parties from 1 to N.

Recently, the High-Quality Development Conference for Young Entrepreneurs in Qinghai Province was held in Xining, Qinghai Province. Young entrepreneurs gathered together to discuss industry development trends, outlook on economic development prospects, and to seek the road to high-quality development. Zhang Zhengping, Vice President of the Youth Entrepreneurs Association of Chongqing and Rotating President of Chongqing Sokon Industry Group Stock, was invited to deliver a keynote speech at the conference, fully introducing the development process of Chongqing Sokon Industry Group Stock, and analyzing the important role of new productive forces in promoting high-quality development based on practical experience. In his speech, Zhang Zhengping mentioned that Chongqing Sokon Industry Group Stock achieved a revenue of 65.044 billion yuan in the first half of the year, with a year-on-year growth of 489.58%, and a net profit of 1.625 billion yuan. He stated that such achievements were attributed to the spirit of cross-border integration and innovative exploration embodied by the Wanjie brand, as well as the recognition of users for Chongqing Sokon Industry Group Stock. Zhang Zhengping pointed out that new energy vehicles are typical representatives of new productive forces, and developing new productive forces is an inherent requirement and focus for promoting high-quality development of enterprises. In response to the call for developing new productive forces, Chongqing Sokon Industry Group Stock has conducted in-depth practices around model innovation, technological innovation, product innovation, and service innovation. In 2021, Chongqing Sokon Industry Group Stock and Huawei initiated a pioneering cross-industry cooperation model between vehicle manufacturers and ICT companies, jointly creating the integrated brand "Wanjie", and innovatively launching a series of "new luxury" car products that combine "traditional luxury + technological luxury". Within just 28 months, they achieved the production of the 400,000th new car, making it the fastest-growing new energy vehicle brand at such a speed. In particular, the Wanjie M9 has consistently ranked among the top-selling luxury car brands in the Chinese market priced at 500,000 yuan, and the annual cumulative delivery of the Wanjie new M7 has also exceeded 130,000 units, becoming a well-deserved national SUV brand. As the business continues to expand rapidly, the cooperation between Chongqing Sokon Industry Group Stock and Huawei is further deepening. Last month, Chongqing Sokon Industry Group Stock officially invested in and acquired stakes in Yingwang Company, marking an upgrade in the cooperation between Chongqing Sokon Industry Group Stock and Huawei to a comprehensive "business + equity" cooperation model, opening a new starting point for sustainable development of cooperation between the two parties. In terms of exploring core technologies for electrification and intelligence, Zhang Zhengping stated that Chongqing Sokon Industry Group Stock is firmly committed to practicing the path of smart electric integration under the concept of software-defined cars. By combining users' diversified driving needs, they have independently innovated and developed the Chongqing Sokon Industry Group Stock Magic Platform, which is currently the only platform compatible with three forms of new energy power: hybrid, electric, and plug-in hybrid. The platform features "smart security, diverse power options, versatile space, and intelligent guidance" aims to bring users a driving experience that is "easy, convenient, and extremely safe". In conclusion, Zhang Zhengping shared that in the past year, as a representative of new productive forces, Chongqing Sokon Industry Group Stock has received numerous reports from authoritative media. In the future, through the development of new productive forces, he hopes to truly gain user recognition of the brand value of Chinese vehicles, jointly promote the high-quality development of the industry, and contribute to the construction of a strong automotive nation in China.

10/09/2024

Half-year revenue of 20.2 billion yuan! How did BYD Company Limited (002594.SZ) ascend to the top of A-share "Research and Development King"?

In recent years, with the rapid development of Chinese car companies in technology, brand, service, and a deep understanding of the local market and consumer needs, electrification has weakened the technological barriers of traditional fuel vehicles, and China's brand market share continues to rise. This trend is evident in the semi-annual reports disclosed by major mainstream listed car companies for 2024. The financial report shows that BYD Company Limited (002594.SZ) had a first half revenue of 301.127 billion yuan, a year-on-year increase of 15.76%, surpassing SAIC Motor Corporation for the first time and ranking first among domestic mainstream car companies. In addition, BYD Company Limited had a first half net profit of 13.631 billion yuan, a year-on-year increase of 24.44%, also ranking first in the industry. From the financial report, it is clear that the first-half revenue of independent brands has grown rapidly. In addition to BYD Company Limited, companies like Geely, Great Wall, Chongqing Sokon Industry Group Stock, NIO, and XPeng have seen rapid revenue growth. In contrast, joint venture brands, once seen as "cash cows" contributing most profits to large car groups, are no longer shining. The profits of mainstream joint venture brands have almost all declined, with Guangzhou Automobile Group's joint venture profits down 40% in the first half of the year, Dongfeng Group's joint venture profits down 46%, and SAIC-GM losing 2.275 billion yuan. Behind the high-speed growth of independent brand performance is the comprehensive surpassing of product strength through huge R&D investment. In the case of BYD Company Limited, R&D investment in the first half of the year ranked first, reaching 20.2 billion yuan, a year-on-year increase of 42%, hitting a historical high and surpassing the net profit by 6.6 billion yuan. Looking at the first half of the year, BYD Company Limited's R&D investment exceeds that of Tesla (16.1 billion yuan), almost equal to the sum of Great Wall Motor (6.38 billion yuan), NIO (6.08 billion yuan), Geely Auto (4.55 billion yuan), and Chongqing Changan Automobile (4.61 billion yuan). R&D investment far exceeding net profit is another proof of BYD Company Limited's high regard for technology R&D. By comparing R&D investment with net profit, in the past 14 years (from 2011 to present), BYD Company Limited has had 13 years with R&D investment higher than net profit, sometimes even several times higher. By current estimation, BYD Company Limited's full-year R&D investment in 2024 is expected to reach the level of 50 billion yuan. Furthermore, looking at the entire A-share market, data from Wind shows that in the first half of this year, BYD Company Limited rose to first place on the R&D expense list, becoming the undisputed "king of R&D" among more than 5300 listed companies in A shares. This long-term, high-intensity R&D investment has enabled BYD Company Limited to build a huge pool of technology. This year, BYD Company Limited successively released groundbreaking technologies such as the Xuanji architecture, fifth-generation DM technology, and Easy Three, providing strong support for rapid sales growth. In the first half of this year, BYD Company Limited achieved sales of 1.61 million vehicles, ranking first in the Chinese car market and also becoming the champion of the global new energy car market. In 2023, BYD Company Limited entered the top ten global car manufacturers for the first time. According to data from MarkLines, in the second quarter of this year, BYD Company Limited's sales surpassed Honda, becoming the seventh largest car manufacturer worldwide. According to the latest data from Yiche.com, BYD Company Limited's monthly sales in July jumped to third place globally, second only to Toyota and Volkswagen. The complete surpassing of the leader of independent brands over the leader of joint venture brands strongly confirms the increasingly solid position of Chinese brands in the domestic market and also shows that the trend of new energy vehicles replacing fuel vehicles is irreversible. In July of this year, the monthly penetration rate of new energy vehicles exceeded 50% for the first time, with this data expected to continue to rise in August. NIO Chairman Li Bin believes that the domestic penetration rate of new energy vehicles has already exceeded 50%, and both pure electric and plug-in hybrid vehicles will accelerate the replacement of fuel vehicles. He predicts that within two years, the penetration rate of new energy vehicles in the Chinese market will exceed 80%. In the next few years, joint venture fuel vehicles will face huge troubles as they will give way to new energy vehicles. This round of the car industry's elimination game is already more than halfway through, with car companies seeking ways to survive. Chinese brands are accelerating their pace, leaving little time for joint venture fuel vehicles.

07/09/2024

Shanghai Fosun Pharmaceutical (600196.SH) receives continuous increase of 3.575 million A shares by its major shareholder! Firmly optimistic about future development.

According to the latest equity disclosure information from the Hong Kong Stock Exchange, Shanghai Fosun Pharmaceutical (600196.SH; 02196.HK) has received intensive additional holdings from its major shareholder Fosun High Technology in the past two weeks. It is reported that on August 30, 2024, Fosun High Technology increased its holdings in Shanghai Fosun Pharmaceutical by 885,000 A-shares, with an average purchase price of 22.594 yuan. Subsequently, from September 3 to 5, it continued to increase its holdings of Shanghai Fosun Pharmaceutical A-shares for three consecutive days, with average purchase prices of 22.721 yuan, 22.603 yuan, and 22.833 yuan respectively. It is estimated that since August this year, Fosun High Technology has accumulated 3.575 million A-shares of Shanghai Fosun Pharmaceutical, increasing its shareholding percentage from 41.8% to 41.97%. The continued increase in holdings by Fosun High Technology demonstrates the confidence of the major shareholder in the future development of Shanghai Fosun Pharmaceutical. Not only has the parent company Fosun High Technology continued to increase its holdings, but Shanghai Fosun Pharmaceutical itself has also been frequently buying back its own shares since the beginning of this year. According to an announcement on September 3, 2024, as of August 31, Shanghai Fosun Pharmaceutical had repurchased a total of 2,836,100 shares in the A-share market, with a total repurchase amount of approximately 62.83 million yuan, at a repurchase price range of 21.87 yuan/share to 22.42 yuan/share. In addition, Shanghai Fosun Pharmaceutical implemented its first H-share repurchase on August 28. As of September 5, 2024, Shanghai Fosun Pharmaceutical had repurchased a total of 3,850,500 H-shares, with a total repurchase amount of approximately 47.253 million Hong Kong dollars, at a repurchase price range of 12.64 yuan/share to 11.98 yuan/share. Shanghai Fosun Pharmaceutical's latest disclosed 2024 interim report shows that the company achieved operating income of 20.463 billion yuan in the first half of the year, excluding COVID-related products, with a year-on-year revenue growth of 5.31%. The core pharmaceutical business achieved operating income of 14.677 billion yuan in the first half of 2024. Among them, income from innovative drugs exceeded 3.7 billion yuan, maintaining steady growth. At the same time, Shanghai Fosun Pharmaceutical further consolidated its global operational capabilities, achieving overseas income of 5.51 billion yuan, a year-on-year increase of 15.13%. Since 2024, Shanghai Fosun Pharmaceutical has continuously promoted asset structure optimization and accelerated cash flow. In the first half of this year, Shanghai Fosun Pharmaceutical achieved operating cash flow of 9.07 billion yuan, a year-on-year increase of 5.36%, surpassing the growth of operating profit in the same period. Since 2024, Shanghai Fosun Pharmaceutical has completed disposals and signed disposal contracts with a total amount exceeding 2 billion yuan. With the impact of COVID products basically cleared, Shanghai Fosun Pharmaceutical has further focused on innovative drugs and high-value equipment, injecting new power into high-quality development. In the first half of the year, Shanghai Fosun Pharmaceutical has been favored by multiple investment institutions. Among them, Morgan Stanley has raised its target price for Shanghai Fosun Pharmaceutical (02196.HK) Hong Kong stocks to 1.7 Hong Kong dollars and maintained a "buy" rating on Shanghai Fosun Pharmaceutical. Another international investment bank, Citigroup, has set a target price of 2 Hong Kong dollars for Shanghai Fosun Pharmaceutical's Hong Kong stocks, maintaining a "buy" rating. CITIC SEC has given Shanghai Fosun Pharmaceutical (600196.SH) a target price of 32 yuan for A-shares and maintained a "buy" rating.

06/09/2024

Decline in performance, soaring goodwill, are the aftereffects of Lepu Medical Technology's (300003.SZ) "growth through acquisition" strategy becoming apparent?

The development risks of the "merger man" Lepu Medical Technology (300003.SZ) seem to be emerging. On August 24, Lepu Medical Technology disclosed its performance report for the first half of 2024. During the period, the company achieved operating income of approximately 3.384 billion yuan, a year-on-year decrease of 21.33%; net profit attributable to shareholders was approximately 697 million yuan, a year-on-year decrease of 27.48%; non-GAAP net profit was 647 million yuan, a year-on-year decrease of 28.48%. Looking at a longer timeline, this may be the largest decline in the company's semi-annual report in the past 3 and a half years - in the mid-term of 2022, 2023, and 2024, Lepu Medical Technology's revenue decreased by 18.20%, 19.35%, and 21.33% year-on-year, respectively, and net profit attributable to shareholders decreased by 26.69%, 24.96%, and 30.53% year-on-year, respectively. As the saying goes, "a falling leaf reveals the autumn," the decline in the performance of any company is not without reason. As a leading medical enterprise with multiple listed subsidiaries, there are certainly hidden secrets within. It is reported that Hong Kong stock SCIENTECH (02291) and Science and Technology Innovation Board ChengDu Sheng Nuo Biotec (688117.SH) are listed companies spun off from Lepu Medical Technology. With the continuous decline in performance, Lepu Medical Technology's stock price obviously cannot hold up: from a peak of 45.8 yuan in July 2020, it has fallen to just over 10 yuan now, a cumulative decline of over 78%. So, what has happened to the "merger man" Lepu Medical Technology? Sharp decline in pharmaceutical revenue, cash flow under pressure Founded in 1999, Lepu Medical Technology went public on the Shenzhen Stock Exchange's Growth Enterprise Market in 2009. The company is a provider of comprehensive solutions covering the entire life cycle of cardiovascular diseases, with business segments including medical devices (including cardiac treatment products, new interventional diagnostic and therapeutic business, in-vitro diagnostic reagents, and medical product distribution), pharmaceutical business, medical services, and health management. Looking at the performance report for the first half of 2024, it is clear that the simultaneous decline in the performance of the three major business segments was a key factor leading to the overall decline in the company's performance. Specifically, during the reporting period, the medical device segment, which had the largest revenue scale, achieved revenue of 1.754 billion yuan, a year-on-year decrease of 13.01%; the pharmaceutical segment achieved revenue of 1.135 billion yuan, a year-on-year decrease of 29.05%, the largest decline among the three segments; and the medical services and health management segment achieved revenue of 496 million yuan, a year-on-year decrease of 27.80%. Regarding the performance mentioned above, Lepu Medical Technology stated at the earnings conference that the performance did not meet expectations, mainly due to the advancement of the 'Four Same' policy for drugs, which hindered retail shipments and reduced pharmacy sales marketing, and it may take 1-2 quarters to comb through channel prices and digest channel inventory. Looking more closely, the medical device segment, as the segment with the largest revenue scale in the company's business, includes three sub-segments: cardiovascular intervention, in-vitro diagnostics, and surgical anesthesia. The decline in performance in the first half of this year was mainly due to the drag from the in-vitro diagnostic business. In the first half of 2024, Lepu Medical Technology's in-vitro diagnostic business achieved operating income of 198 million yuan, a year-on-year decrease of 57.15%, mainly due to the high base number of epidemic-related products in the same period last year and price declines due to increased competition for some products. In addition, the surgical anesthesia business decreased by 3.87% year-on-year, while cardiovascular intervention increased by 16.92% year-on-year. The pharmaceutical segment, with the largest decline in percentage, is mainly due to two reasons: one is the continued promotion of the drug centralized procurement policy, which has led to a significant decrease in drug prices. Although sales have increased, overall revenue has been affected. The other reason is that the increase in research and development investment has not translated into actual economic benefits in the short term. The research and development cycle for new drugs is long, and there is high uncertainty. In its financial report, Lepu Medical Technology pointed out that it currently believes that the adjustment of the drug business due to the clearance of retail channel inventory may need to continue for 1-2 quarters. It is expected that the raw material drug business will remain stable year-on-year, and the business revenue of the preparation sector may decrease to about 15-16 billion yuan. After the channel clearance is completed, excluding innovative drugs, the recovery of pure sales of related products is expected to drive a slight rebound in business revenue for the preparation sector. Furthermore, the decline in revenue from the medical services segment is mainly due to the slight decline in demand for home-related medical device products for monitoring vital signs domestically and internationally after the epidemic. The company's requirements for this business have shifted from continuous revenue growth to a strategic shift towards achieving stable profitability, revealing the fact that the growth of this business is weak. The negative effects of the aforementioned double decline in performance are also reflected in Lepu Medical Technology's cash flow. According to relevant financial data, in the first half of 2024, the company received cash from selling goods and providing services of 3.129 billion yuan, a year-on-year decrease of 28.14%. The net cash flow generated by operating activities was 159 million yuan, the net cash flow generated by investment activities was -822 million yuan, and the net increase in cash flow during the period was -640 million yuan, further reflecting the current pressure on cash flow in the company.For practical economic reasons and others, Lepu Medical Technology's performance decline "butterfly effect" has already started to emerge.High goodwill risks are emerging, facing significant impairment risks It is worth noting that, compared to the decline in performance, Lepu Medical Technology is facing an even more worrying greater risk that is also emerging. That is the "aftermath" of mergers and acquisitions. Observing that after Lepu Medical Technology went public, there was a shift from a focus on research and development innovation to more emphasis on capital operations, attempting to follow the "buy-to-grow" route. For example, in 2010, the company successively acquired Weijinfan Medical, Beijing Sida, and held shares in Qinming Medical Devices, entering the market for heart valves and diagnostic equipment. In 2011, the company also acquired a controlling stake in Dutch company COMED B.V. According to incomplete statistics, from 2010 to 2019, Lepu Medical Technology made more than 30 acquisitions, obtained stakes in approximately 30 companies, with a total transaction value exceeding 6 billion yuan. The short-term growth effects brought about by these large-scale acquisitions are evidently significant - Lepu Medical Technology has not only become a leading cardiovascular health industry platform in China, but its performance has also rapidly grown. Revenue increased from 1.669 billion yuan in 2014 to 6.36 billion yuan in 2018, and net profit increased from 423 million yuan in 2014 to 1.22 billion yuan in 2018. However, with every blessing comes a curse, and the "buy-to-grow" operation has also brought about some aftermath. On the one hand, the debt levels are persistently high. From 2020 to the first half of 2024, the company's total debt levels were 7.619 billion yuan, 8.425 billion yuan, 8.114 billion yuan, 7.525 billion yuan, and 7.856 billion yuan respectively. With such high debt levels, coupled with declining revenue and reduced cash flow, the company is likely to face considerable short-term liquidity pressures. On the other hand, the high goodwill also poses risks of impairment. It is reported that under the growth-through-acquisition model in recent years, Lepu Medical Technology's goodwill has been continuously increasing, reaching 3.948 billion yuan by the first half of 2024. With such high goodwill levels, accompanied by declining performance of some subsidiaries, the risk of impairment is not insignificant. For example, Lepu Pharmaceutical, Zhejiang Lepu Pharmaceutical, and Bingkun Medical were major subsidiaries of the company in 2023, with an impact on the company's net profit exceeding 10%. Based on the financial reports, Lepu Medical Technology has been making impairment provisions for the goodwill of these subsidiaries in recent years, but some subsidiaries have shown a clear downward trend in performance. According to relevant financial data, in the first half of 2024, Lepu Pharmaceutical's revenue decreased by 40.28% year-on-year, Bingkun Medical's operating income decreased by 1.99% year-on-year, and Zhejiang Lepu Pharmaceutical's operating income increased by only 1.42% year-on-year. Correspondingly, the year-end goodwill balances of these three major companies were 311 million yuan, 375 million yuan, and 533 million yuan, respectively, and have not been depreciated since 2019. Therefore, with the impact of declining or stagnant growth in the performance of these three major companies, the risk of impairment facing Lepu Medical Technology is evident. In summary, where there is smoke, there is fire. As a leading medical and health industry group in China, Lepu Medical Technology has already laid the groundwork for its subsequent decline in performance through the short-term and rapid route of "buy-to-grow". After all, for a medical enterprise, strengthening research and development innovation, optimizing product structure, expanding market channels, and striving to enhance the company's core competitiveness are the key factors for achieving sustainable development.

05/09/2024

Beijing Roborock Technology (688169.SH) launches new flagship model G20S Ultra sweeping robot Siasun Robot & Automation has achieved many new breakthroughs in core technology issues.

On September 5, Beijing Roborock Technology (688169.SH) launched a new flagship product, the Stone Self-Cleaning Sweeping and Mopping Robot & mopping G20 Ultra, featuring the company's latest technological achievements, bringing breakthroughs in key technologies such as navigation, obstacle avoidance, and hair entanglement. The Stone G20S Ultra is equipped with the new upgraded "Star Matrix Navigation 2.0" system, achieving a super-thin size of 7.98cm. Additionally, it is equipped with Stone's industry-leading 0 entanglement sweeping system and chassis lifting system, achieving no hair entanglement and overcoming obstacles up to 4cm high, further enhancing cleaning efficiency and completion rate in low height spaces and complex environments. As a global leader in the sweeping and mopping robot industry, Beijing Roborock Technology's launch of this new flagship product demonstrates the main direction of industry technological iteration and will help the company compete in the global sweeping and mopping robot industry, contributing to a greater market share and revenue for the company. Beijing Roborock Technology, as a Chinese domestic sweeping and mopping robot brand, is also a representative enterprise of Chinese sweeping and mopping robots going global, with its market share of intelligent cleaning products increasing globally. According to the President of Beijing Roborock Technology, Quan Gang, the company is increasing its investment in research and development, overcoming various technical challenges in sweeping and mopping robots, promoting performance breakthroughs and adapting to the evolving needs of global users. The company's research and development investment in the first half of the year reached approximately 410 million yuan, a year-on-year increase of 42.92%. With the continuous improvement of the quality of life environment and the trend of more diverse and personalized home decoration styles, there are greater challenges in household cleaning. Achieving efficient cleaning in low height spaces and complex environments has become one of the key focuses of flagship sweeping and mopping robot products. The Stone G20S Ultra features a super-thin body size of 7.98cm, signifying not only another breakthrough in underlying technology but also an increase in effective cleaning area, covering many low height spaces such as under beds and sofas. It is equipped with sensors to ensure smooth navigation in low height spaces, avoiding getting stuck and improving cleaning coverage. In addition to low height spaces, traditional challenges for sweeping and mopping robots include push-pull door tracks, sunken floors, medium to long-pile carpets, and other extreme scenarios. The Stone G20S Ultra features an industry-first chassis lifting system, with independent modules driving the chassis to overcome obstacles up to 4cm high. It can navigate through obstacles like threshold gates without human assistance, broadening the boundaries of sweeping and mopping and ensuring more thorough cleaning. Hair cleaning has been a long-term technical challenge for the sweeping and mopping robot industry, and the Stone G20S Ultra features a revolutionary 0 entanglement sweeping system that efficiently collects hair without entanglement. Furthermore, the Stone G20S Ultra boasts the industry's highest 18500Pa hurricane suction power, with longer brush bristles covering a larger area, a stronger bristle and rubber brush combination for effective hair collection, shorter paths for the double brushes to prevent entanglement, and a 45 tilted V-shaped spiral design to gather hair towards the center. The dual-speed differential brush then separates strands of hair, and powerful airflow sucks the hair into the dust box. Certified by SGS and TUV, the G20S Ultra achieves a 0% hair entanglement rate and 100% hair suction rate. Algorithm technology is the underlying technology for the intelligence of sweeping and mopping robots, and in recent years, the industry has accelerated the application of AI big models in sweeping and mopping robots. The Stone G20S Ultra introduces big model technology for more intelligent, convenient, and practical interactions, covering user cleaning needs comprehensively and executing cleaning tasks at any time. The Stone G20S Ultra also offers fault diagnosis and answers to professional knowledge and usage tips through voice-controlled interactions, becoming a user's exclusive cleaning assistant. The Stone G20S Ultra also features two exclusive modes. In the "AI Worry-Free Mode 2.0", the sweeping and mopping robot intelligently recognizes the floor material and room type, automatically adjusts cleaning strategies, and customizes cleaning standards based on user preferences.Cleaning method, achieve one-key autonomous cleaning. Under "Pet Mode 3.0", it can automatically identify the pet supplies area, carry out targeted cleaning, making cleaning easier and smarter."Bonjour, comment a va ?" "Hello, how are you?"

05/09/2024

Starting from the semi-annual report of Beijing Roborock Technology (688169.SH), we explore how the "floor-sweeping Siasun Robot & Automation leader" can release long-term value.

On August 29, Beijing Roborock Technology (688169.SH), one of the leaders in the sweeping Siasun Robot&Automation industry, released its performance report for the first half of 2024, attracting attention with its consistent growth and development capabilities. In the first half of 2024, Beijing Roborock Technology achieved revenue of 4.416 billion yuan, a year-on-year increase of 30.90%, and net profit attributable to shareholders of 1.121 billion yuan, a year-on-year increase of 51.57%. During the period, the net cash flow generated from operating activities increased to 1.031 billion yuan, and the net assets attributable to shareholders further expanded to 11.925 billion yuan, showing stable growth in overall core financial indicators. Looking at the financial report, the company's performance continues to show steady growth for two main reasons: first, the company's "going global" strategy is significantly effective, with outstanding product performance and technological advantages leading to further expansion of global market share and rapid growth in overseas income, driving a significant increase in revenue compared to the previous year; second, the company's wholly-owned subsidiary achieved a beneficial tax rate through the recognition as a key software enterprise encouraged by the government, positively impacting net profit. The above reasons for growth may seem simple and straightforward, but from a deeper perspective, it clearly indicates that Beijing Roborock Technology, as a leading company in the industry, is taking strides towards farther, deeper, and higher goals. 2024 marks the tenth anniversary of Beijing Roborock Technology. Looking back on these ten years, from using technological strength as a breakthrough point to becoming a leading enterprise in the industry, to continuously expanding product categories and constructing a second growth curve with handheld cordless vacuum cleaners, floor scrubbers, and washer-dryers, as well as the dual-drive of domestic and international sales and the increasingly prominent global layout... the strategic layout of Beijing Roborock Technology has not been a wasted step. Guided by its innovative spirit and forward-looking strategic vision, the company has been walking further along the path of long-term development. Now, let's further explore where Beijing Roborock Technology's consistent growth over the past decade comes from, through the analysis of its half-year report. Deepening the leading effect of innovation and achieving breakthroughs in growth engines from "1 to N" As a technology-driven science and technology company, technological innovation is the foundation and vitality of the company, clearly evident throughout Beijing Roborock Technology's growth over the past decade. Vertically, Beijing Roborock Technology's innovation is mainly reflected in the technological innovations of sweeping Siasun Robot&Automation, such as overcoming the technical barriers of LDS technology early on, promoting the popularity of sweepers, and pioneering the world's first dual-source solid-state laser navigation obstacle avoidance system, once again revolutionizing the navigation obstacle avoidance experience of sweepers. Horizontally, its innovation is mainly reflected in breakthroughs in product categories, such as revolutionary innovation in washer-dryers using leading molecular sieve technology to create the world's third drying technology. With outstanding product quality and innovative technology, Beijing Roborock Technology has developed into a leading brand in the sweeping Siasun Robot&Automation market. According to Euromonitor International data, Beijing Roborock Technology ranked first in global sweeping Siasun Robot&Automation market sales in 2023, further highlighting the company's leading position in the industry. Of course, strong innovation not only consolidates Beijing Roborock Technology's leading effect but also brings positive effects that are fully reflected in the company's product vitality. Beijing Roborock Technology's main business is the design, research and development, production, and sales of intelligent cleaning Siasun Robot&Automation and other smart hardware products, including intelligent sweepers, handheld vacuum cleaners, commercial cleaning Siasun Robot&Automation, and floor scrubbers. In the first half of the year, intelligent sweepers as the company's main business, with outstanding product quality and innovative technology, still firmly occupy consumers' minds, bringing strong vitality to the company's performance - during the period, the company's main business revenue was 4.408 billion yuan, a year-on-year increase of 31.5%. Furthermore, the new products launched during the reporting period, such as the intelligent sweeper G20 series, the P20 series, and the floor scrubber A20 series, have received good reviews, further enhancing user awareness of the company's brand and continuously increasing the company's market share. According to AVC Cloud data, in 2023, the company's online market retail sales share of sweeping Siasun Robot&Automation reached 23.89%, an increase of 2.61 percentage points year-on-year. At the same time, the washer products launched by Beijing Roborock Technology are gradually becoming the company's second growth curve. As a new and distinct product of the company, relying on Beijing Roborock Technology's leading technological brand image, the sales performance during the 618 period this year was impressive, with a year-on-year increase of 168.38% in total channel sales and a 434.88% increase in sales volume. Among them, the underwear washer m1pure ranked at the top in the category during the 618 period.Cat washing machine ranked top 1 in the new product list, Tmall washing and drying integrated machine ranked top 1, washing and drying integrated machine h1air, ranked second in the Tmall washing machine new product list, and ranked second in the washing and drying integrated machine new product list.In this regard, Chang Jing, CEO of Beijing Roborock Technology, admitted that "the stone washing and drying machine is indeed relatively new to users, and it requires a certain amount of time and resources to educate the market. However, relying on Beijing Roborock Technology's leading technology brand image, as well as the unique advantages of molecular sieve drying technology, the stone molecular sieve washing and drying machine will definitely occupy a place in the washing machine market and become another major category to support the company's long-term growth." Of course, Beijing Roborock Technology's revitalization through strong innovation to drive diverse growth engines is not achieved overnight, but rather the result of positive feedback obtained through a large amount of investment and careful research. According to financial report data, the accumulated R&D investment from 2019 to 2023 exceeded 2 billion yuan, with R&D expenses accounting for 4.59%, 5.80%, 7.55%, 7.37%, and 7.15% of total revenue respectively. As of the first half of 2024, the company's R&D investment was 410 million yuan, a year-on-year increase of 42.92%; during the period, there were 786 R&D personnel, a year-on-year increase of 57.52%, and 267 new authorized patents. From the above, it can be seen that, through technological innovation to build a technological moat, Beijing Roborock Technology not only strengthens the company's leading advantages, but also achieves breakthroughs from "1" to "N", building multiple growth curves. As these growth curves continue to invigorate growth, Beijing Roborock Technology is expected to drive the "flywheel" of growth and lead overall performance to the next level. Product strength solidifies high-quality image, global layout fruitful Looking at the growth trajectory of Beijing Roborock Technology, "going abroad" is undoubtedly one of the ways for the company to gain more incremental space. It is reported that since 2019, as the company's own brand scale has continued to expand, Beijing Roborock Technology has gradually expanded its overseas business, focusing on the development of the US, European, and Southeast Asian markets. It has not only gradually increased its market share in overseas markets through localized operations, strengthened brand promotion, and improved after-sales service measures, but also further enhanced brand awareness and user reputation by participating in international well-known exhibitions and strengthening channel construction with Wuxi Online Offline Communication Information Technology Co., Ltd. As of now, Beijing Roborock Technology products are available in more than 170 countries and regions worldwide, with over 15 million households using stone floor sweeping Siasun Robot&Automation. Its market share ranks among the top three in over 14 countries and regions worldwide, including Germany, South Korea, and Turkey. However, it should be noted that the path to overseas growth is not entirely smooth sailing. Opportunities and challenges often coexist. From a global perspective, the small market size and low industry penetration rate globally undoubtedly mean that the global floor sweeping Siasun Robot&Automation market is still a vast "ocean of stars" waiting to be explored: according to Euromonitor data, by 2023, the global floor sweeping Siasun Robot&Automation market will reach 7.022 billion US dollars, which is not a huge market size overall. At the same time, in 2023, the country with the highest penetration rate for sweeping machines is Norway, with a penetration rate of only 23.4%. In the long run, floor sweeping Siasun Robot&Automation machines are expected to catch up with washing machines and dishwashers in terms of penetration rates in some countries, with considerable growth potential. Although there is considerable room for industry growth, it does not mean that Beijing Roborock Technology's path to overseas expansion is smooth sailingin particular, the company needs to break free from the suppression of the overseas old-brand behemoth iRobot on one hand, and on the other hand, with Chinese leading brands such as Ecovacs Robotics and roborock Robotics increasing their expansion into overseas markets, Beijing Roborock Technology also faces pressure from these brands to grab a share of the overseas market. Fortunately, through continuously enhancing product strength and channel strength, for Beijing Roborock Technology, the overseas market is clearly more of an opportunity than a challenge. According to observations by GMTEight, in the layout of overseas markets, Beijing Roborock Technology has taken potential market size and high-quality image as entry points, and has gained wide consumer recognition through continuous brand investment and R&D investment. At the same time, by focusing on overseas offline distributors and cross-border e-commerce, they quickly break through channel barriers and build a complete and comprehensive global sales network. Numbers are the best touchstone. Currently, Beijing Roborock Technology has entered 20 Wuxi Online Offline Communication Information Technology Co., Ltd. channels in the United States, and has successfully entered 189 offline stores in the largest commercial supermarket Target in the USA this year, and will gradually enter over 1000 Target offline stores in 2024. In the Australian region, they have broken through 6 major offline channels and reached 200 offline stores. In Turkey, they have entered 180 offline stores. In the Nordic region, they have successfully developed 140 stores to set up a dedicated area for the stone brand. Meanwhile, during the PrimeDay promotion in 2024, Beijing Roborock TechnologThe Y product has achieved good sales performance in both the North American and European markets, with multiple series products ranking at the top of the sales charts. Specifically, the Q5Pro series product has become the best-selling robotic vacuum cleaner in the Sweeping category on Amazon in the United States; the QrevoPro series product ranks first in sales in the Sweeping category on Amazon in Germany.Thanks to the positive effects brought by the above-mentioned product and channel strengths, the globalization layout of Beijing Roborock Technology has obviously entered a period of harvest, helping the company achieve significant growth in the first half of the year. According to financial data, in the first half of 2024, the company's domestic and overseas revenues contributed evenly, with a balanced layout, jointly promoting the sustainable development of the company - during the period, the company recorded domestic revenue of 21.22 billion yuan and overseas revenue of 22.94 billion yuan. Clearly, we can see that under the company's forward-looking strategic layout and efficient execution, the overseas market is gradually becoming a significant growth driver that Beijing Roborock Technology cannot afford to ignore. Conclusion How long is a decade? In economics, we often see a decade as a cycle, referring to a period of significant achievements or prosperity as a "golden decade." Regardless of how long it has been, the "golden decade" has always been acclaimed, enduring time and historical scrutiny. Established in 2014, Beijing Roborock Technology, from its initial technological breakthrough of "0 to 1," to its current sustainable growth of "1 to N," has clearly reaped its own "golden decade," with inherent growth potential and long-term value. However, the market does not seem to recognize the investment value brought by Beijing Roborock Technology's solid upward trajectory and continuous breakthroughs over the past decade. Earlier, Beijing Roborock Technology disclosed its mid-term performance forecast, and the market did not show the expected positive sentiment due to concerns over fluctuations in export tariffs. But looking at the latest financial report, the market may have been overly concerned. In the first half of the year, benefiting from rapid growth in overseas consumer demand, Beijing Roborock Technology achieved fast growth in overseas revenue, driving the overall performance of the company steadily upward. The resilience and growth highlighted in this aspect undoubtedly transcend the impact of overseas tariff issues, demonstrating the underlying growth color that a leading company should possess. Therefore, looking at the growth potential reflected in this mid-term performance report, we may consider having more confidence and patience in Beijing Roborock Technology, quietly waiting for its long-term value to be realized.

04/09/2024

Shandong Xinchao Energy Corporation (600777.SH): Huaneng Hai Invests billions of dollars in acquisitions but ultimately fails, investor losses raise concerns.

On the evening of August 30, Shandong Xinchao Energy Corporation announced that it had received a "Notification Letter" from Beijing Huinenghaitou New Energy Development Co., Ltd. (referred to as "Huinenghaitou"), and according to Article 83 of the "Regulations on the Management of Acquisition of Listed Companies", due to Huinenghaitou and related shareholders being considered as acting in concert, Huinenghaitou had decided to terminate the planning of the partial tender offer to acquire the company's shares. The announcement revealed that the second largest shareholder of Shandong Xinchao Energy Corporation, Beijing Shengbang Kehua Trading Co., Ltd. (holding 5.51% of shares) borrowed 1.2 billion yuan from a related company of Huinenghaitou. The fourth largest shareholder, Bona Sicheng Mai Investment Fund 1 (holding 4.98% of shares), and the fifth largest shareholder, Fanhaihuixiang Long-term Value Private Equity Fund (holding 4.56% of shares), had their actual contributors borrow 2 billion yuan from a related company of Huinenghaitou. As of now, Huinenghaitou, Beijing Shengbang, Sicheng Mai 1, Fanhaihuixiang, Lu Jianxiong and Li Mingjing (the only two shareholders of Beijing Shengbang) respectively hold 4.99%, 5.51%, 4.98%, 4.56%, 0.008%, and 0.002% of Shandong Xinchao Energy Corporation's shares, totaling 20.054%. On September 2, Shandong Xinchao Energy Corporation resumed trading and immediately hit the limit down, whereas after Huineng Haitou announced the tender offer on August 23, the stock price of Shandong Xinchao Energy Corporation had hit the limit up for three consecutive days. Investors found themselves caught in the mix of ups and downs. Information showed that Huinenghaitou and related shareholders began to enter Shandong Xinchao Energy Corporation in 2023 and by the end of the first quarter, held nearly 20% of the shares. Market observers believe that the reason for concealing the concerted action was to save on acquisition costs, but at the expense of investors' interests. The decision published by the Shandong Securities Regulatory Bureau regarding Beijing Huinenghaitou New Energy Development Co., Ltd. and related entities stated that when Huinenghaitou's cumulative holdings in Shandong Xinchao Energy Corporation reached 5% and for every additional 5%, Huinenghaitou and related entities failed to fulfill their reporting and announcement obligations as required, and were prohibited from buying or selling Shandong Xinchao Energy Corporation's shares. Furthermore, for every 1% increase after the aforementioned entities reached 5% holding in Shandong Xinchao Energy Corporation, they failed to inform the listed company and make the necessary announcement. Based on the shareholding information of the four shareholders mentioned above, it is estimated that within a few months, Huinenghaitou failed to disclose its increased holdings as required over 10 times, almost weekly, causing significant impact on the stock price. However, the stock price of Shandong Xinchao Energy Corporation had been hovering around 3 yuan in the first quarter without significant increase. For investors who have sold Shandong Xinchao Energy Corporation over the past half year, or are still holding it, they have clearly incurred significant losses. Legally speaking, concealing the relationship of concerted action constitutes inducing empty and fraudulent statements, and the offenders should bear the corresponding civil liability towards the investors. Inducing empty and fraudulent statements refer to the act of disseminating false negative information, or concealing substantial positive news, leading investors to sell stocks at lower prices, only to suffer losses after the falsehoods are revealed and prices rise again. According to the "Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Civil Compensation Cases for Securities Market False Statements", if the plaintiff sells the relevant securities in the context of inducing empty and fraudulent statements, the causal relationship between the investor's investment decision and the false statements is established. Therefore, the perpetrators of irregular disclosure as a form of inducing empty and fraudulent statements should bear the corresponding civil liability towards the investors.

03/09/2024

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